What helped me actually start analyzing deals (instead of overthinking everything)

Question

Hey everyone,

I’m pretty early in my investing journey here in Northeast Ohio (Summit/Stark/Portage County area), and I wanted to share something that helped me finally get momentum.

For a while, I felt like I was stuck in analysis paralysis. I was looking at deals, watching numbers, reading posts… but not confidently pulling the trigger because I didn’t fully trust my numbers.

What changed for me was simplifying how I analyze deals:

• Focus on ARV (realistic, not optimistic)
• Be honest about rehab costs (this one hurt at first)
• Always include holding + selling costs
• Back into a max offer instead of starting with price

Once I started consistently running deals this way, things started to click.

One thing I realized is how easy it is to underestimate costs or overestimate ARV when you’re new — and that’s where a lot of bad deals come from.

I actually ended up putting together a simple calculator for myself to run deals quickly and keep everything consistent. It’s nothing fancy, but it helped me build confidence in my numbers.

Curious for those who are further along:

What was the biggest mistake you made when you first started analyzing deals?

And for newer investors like me:

What part of deal analysis do you find the most confusing?

Looking forward to learning from everyone here.

Kenneth Garrett · Answer

@Beau Menegay

The reality of analyzing deals is to be honest with yourself and rely on as my facts as possible.

ARV analysis is fact based.  The comps are there for you to Analyze.  Don’t grab a comp that doesn’t match the property you’re comparing to.  Neighborhood, school districts can impact the numbers.  I prepare a spread sheet and take a least 3 comps and do an average.  It’s a conservative way to analyze.

Rehabs are always a bit tricky depending on what you are going to do.  I’m pretty solid with my rehab numbers.  I know my numbers, but it doesn’t mean I never go over budget or I find surprises during rehab.  Make sure you are realistic on rehab numbers and you have a buffer for the unexpected.

I include all cost in my numbers.  As a BRRRR investor you need to analyze the end game.  I work backwards.  Potential ARV, rehab cost, purchase price, holding cost, closing cost and rental income.  It’s just a math problem using the best facts you have.

Drew Sygit · Answer

@Beau Menegay and @Brittany Holloway

The maintenance and vacancy metrics actually correspond to the Tenant Class your rental will attract.

Here's what we use:

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score

Pct of Population

Default Probability

800 or more

13.00%

1.00%

750-799

27.00%

1.00%

700-749

18.00%

4.40%

650-699

15.00%

8.90%

600-649

12.00%

15.80%

550-599

8.00%

22.50%

500-549

5.00%

28.40%

Less than 499

2.00%

41.00%

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Brittany Holloway · Answer

So I'm in the same spot, got my first two rentals in Birmingham about a year and a half ago and the part that still trips me up is figuring out what to actually budget for vacancy and repairs. I keep seeing "8% maintenance" or "5% vacancy" thrown around but it feels like guessing, and on a tight cash flow deal those numbers can totally change whether it works or not. Honestly your point about being too optimistic on ARV hit home for me too.

Kamil Lysik · Answer

Great post — keeping the numbers realistic is probably the hardest lesson for beginners. My biggest mistake early on was underestimating rehab costs and assuming projects would move faster than they actually did. Deal analysis definitely gets easier with repetition and real experience.

Brittany Holloway · Answer

Ok this is actually really helpful, thank you. I never thought about it in terms of property class like that but it makes way more sense than just throwing 5% or 8% at everything. My rentals are probably B/C range and looking at those numbers I feel a little better about what I've been budgeting.

Beau Menegay · Answer

Appreciate all the insight here! This has been super helpful!

One thing I’m starting to realize from everyone’s responses is that the “percent rules” (5% vacancy, 8% maintenance, etc.) aren’t really rules—they’re just starting points, and the real skill is knowing when to adjust them based on the property and market.

I’ve been trying to tighten my assumptions by working backwards from conservative numbers—using multiple comps for ARV, adding buffers to rehab, and being more realistic on holding and ongoing costs. It definitely makes some deals look a lot worse on paper, but probably a lot closer to reality.

The part I’m still working on is getting confident in rehab numbers. Sounds like a mix of reps + leaning on contractors early is the way to go.

For those of you who have been doing this a while—did your rehab estimates get dialed in more from experience over time, or from building strong relationships with contractors early on?

Always appreciate hearing how others approached that learning curve.

Greg Kasmer · Answer

@Beau Menegay - I would also think about either offering on properties at a price that makes sense to you and seeing how it plays out (most effective/important), OR deciding what your offer price is and then tracking what the ultimate price the property sells for. As you do this enough in a specific area, you'll begin to see patterns of what things typically sell for in the market. Good Luck!

Beau Menegay · Answer

Appreciate this, Jimmy!

this really hit on a few things I’ve been realizing lately.

The ARV optimism vs rehab reality is definitely something I’ve had to adjust quickly—deals can look great on paper until you tighten those assumptions.

The max offer approach has helped a ton with consistency, but I’m still working on getting more confident in what’s “realistic” vs “hopeful,” especially on rehab numbers in older Midwest properties.

When you were starting out, what helped you calibrate that the fastest—just reps, or did you lean heavily on contractors early on?

Would love to connect as well—always helpful hearing from someone further ahead

What helped me actually start analyzing deals (instead of overthinking everything)

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